Shares of multiplex chain PVR Ltd and Inox Leisure Ltd were down 5% each on Friday, a day when Brahmastra: Part One – Shiva was released. Investors panicked amid mixed reviews for the much-awaited Ranbir Kapoor and Alia Bhatt starrer. However, reports now indicate that the box office collections have improved, which is significant. 100 crore mark. As of Tuesday, the shares of both companies have made up for losses and were slightly lower than they were before the film’s release.
For multiplexes, rising film collections point to better footfalls. Multiplexes have recently felt the trend of boycotting Bollywood on social media as audiences reject bad film content. Hence, how the performance of Brahmastra was paramount. However, despite the heavy-lifting of the Brahmastra, the PVR and Inox are unlikely to replicate the solid performance of Q1FY23 earnings performance in Q2FY23.
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“The figures of the growing collection of Brahmastra provide a temporary respite. This is only the second film to cross Q2FY23 100 crore mark after Thor: Love and Thunder. It compares with four-five films. 100 crore figure in Q1FY23,” said Prabhudas Lilladher analyst Jinesh Joshi. “We don’t think Brahmastra alone will be able to bridge the gap of the last two months’ flop series,” he said.
The next big Bollywood film is Vikram Vedha, which is scheduled to release on 30 September. Tamil film Ponniyin Selvan: Aai is also going to release on the same date. The line-up for Q3FY23 includes Black Panther: Wakanda Forever, Avatar: The Way of Water and Chanakya.
With Q3 of FY23 being the festive quarter, expectations of a meaningful improvement in subscriber count are rising. It remains to be seen whether these films curb the impact of Bollywood’s boycott trend, which is an important near-term watchdog.
Meanwhile, shares of PVR and Inox will also be on the radar of investors for their merger, which is expected to benefit from the synergy. However, long-term improvement in earnings performance of multiplex chains depends on consumer behaviour. According to Edelweiss Securities Ltd, it is important for the audience to re-inculcate the habit of watching movies in cinemas instead of OTT platforms. “In view of the drought in July and August, PVR and INOX face possible cuts in FY13. A September 12 report by Edelweiss said, “Our estimates as well as the Street’s. PVR and Inox shares have declined 1-2.5% in FY23 so far, while the Nifty 500 index has lost 5.2%. For now, both the stocks may show weakness.
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